Retail sales increased slower than expected in May as high interest rates and inflation pressured consumer spending.
Retail sales increased 0.1 percent in May versus the prior month, less than the 0.3 percent economists had expected.
In April, retail sales ticked down 0.2 percent month-over-month, according to revised data from the Commerce Department. The previous estimate for April was flat.
Compared to 2023, retail sales were up 2.3 percent after gaining 2.7 percent in April.
The National Retail Federation Chief Economist Jack Kleinhenz said the year-over-year gain underscored a still-expanding economy. “May’s retail sales give us a snapshot of a reasonably healthy consumer even though spending growth fluctuates somewhat. These numbers indicate that the economy continues to expand at a solid pace.
“Job gains have remained strong, generally supporting consumers’ ability and willingness to spend. Inflation pressure has fallen, especially for retail goods, but higher prices for services continue to weigh on the minds of households,” continued Kleinhenz.
Excluding autos and gas, May retail sales increased 0.1 percent month-over-month, below estimates for a 0.4 percent increase but above the 0.3 percent decline in April.
Within the report, gas stations led the declines month-over-month, falling 2.2 percent from the month prior. Sales at furniture and home stores also lagged, falling 1.1 percent. Meanwhile, sporting goods, hobby, musical instruments, and bookstores had the biggest gains, with sales rising 2.8 percent from the month prior, followed by clothing and clothing accessories stores, up 0.9 percent.
Compared to May 2023, sales at sporting goods, hobby, musical instruments, and bookstores were down 2.6 percent.
Furniture and home furnishings stores, building materials, garden equipment and supplies dealers experienced larger year-over-year declines.
Driving the year-over-year gain of 2.3 percent in May were gains of 3.8 percent at food services and drinking places, 2.7 percent at general merchandise stores, and 2.4 percent at clothing and clothing accessories stores.
